THE WORLD FROM...Jerusalem

AS Prime Minister Yitzhak Rabin gets his new Labor Party government on the road, promising progress toward Palestinian autonomy, hopes are high in government circles that the world is ready to look at Israel anew.

Not since the Gulf war, when Israel won kudos by refusing to retaliate against Iraqi Scud missile attacks, has there been such a strong sense of the fund of international goodwill on which Jerusalem can draw.

"No longer are we necessarily `a people that dwells alone' and no longer is it true that `the whole world is against us,' " said Mr. Rabin to parliament July 13. "We must overcome the sense of isolation that has held us in its thrall for almost half a century."

The new possibilities opened up as soon as the results of last month's elections were announced, and it became clear that Rabin would become Israel's next leader.

Washington welcomed the outcome in quietly diplomatic but evidently encouraging terms. European governments expressed renewed hope in the prospect of Middle East peace. In the region, Egyptian President Hosni Mubarak's undisguised pleasure was matched by Palestine Liberation Organization chairman Yasser Arafat's optimism.

Rabin is anxious to take quick advantage of this global warming toward Israel by securing the $10 billion in US loan guarantees that Washington had denied Mr. Shamir because of his insistence on settling more Jews in the occupied territories.

US Secretary of State James Baker III is due to visit Jerusalem soon, and President Bush has invited Rabin to see him in early August. That trip is expected to be a chummy affair, in contrast to the coldly formal meetings to which Shamir became accustomed.

The newspapers here are full of informal, off-the-record hints from US officials that Washington will be more flexible over the loan guarantees with Rabin than it was with Shamir. Israel's new leader hopes to capitalize on this goodwill by closing the gap that had opened in Jerusalem's relations with its most important ally.

The benefits would not only be financial. As the peace talks resume, Israel is counting on an understanding with Washington about their purpose and goals to ensure less US pressure on Israeli negotiators, and more on the Arabs. That too will be a key plank in Rabin's pitch to Bush.

At the same time, the new government is looking forward to a less tense relationship with Europe. British Prime Minister John Major has expressed an interest in visiting Israel, and Germany, which had frozen its offer of loan guarantees, in line with the US, has also been making friendlier noises since the election.

In the Arab camp, Mr. Mubarak struck up a cordial relationship with Rabin when the latter visited Cairo during his tenure as defense minister, and Morocco's King Hassan, recently interviewed by a French newspaper, did not rule out a meeting with the new Israeli premier.

This new readiness to give Israel a chance, to take Rabin at his word when he says he wants to reach an agreement with the Palestinians within a year, will now be put to the test.

Over the last three years, as the cold war faded, Israel has managed to establish diplomatic relations with a growing number of countries around the world, shedding its pariah status.

But to seal its international acceptance as a member of the community of nations like any other, Israel needs peace with its Arab neighbors, and most urgently with the Palestinians. As he reorders Israel's priorities, Rabin knows that the world's hopes in him are as high as his hopes in the world.

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